European aircraft manufacturer Airbus has taken a 50.01% stake in Canadian group Bombardier’s troubled C-Series jet programme, the future of which was left in doubt after the USA imposed a 300% import tariff on the aircraft, following a complaint from Boeing that they were being sold at “absurdly low” prices.
Boeing complained in April that aid received by Bombardier from the Canadian and UK governments amounted to illegal subsidies, allowing it to sell its C-Series jets to the US airline Delta for less than cost price (Delta had placed a £4.2 billion order for up to 125 of the new jets, with delivery due to begin next year).
In a sign of the extent of the challenges facing Bombardier, Airbus did not pay anything for its majority C-Series stake.
It will use its global footprint and supply chain to provide procurement, sales and marketing support, and it hopes to get round the tariff problem by assembling the C-Series jets destined for US customers at its factory in Alabama.
Bombardier employs 4,000 people in Belfast, including 1,000 on the C-Series programme. The proposed tariffs have left them fearing for their jobs. Both the UK and Canadian governments have threatened to hit back at Boeing by denying the company defence work.
Airbus chief executive Tom Enders said in a statement: “This is a win-win for everybody. The C-Series, with its ‘state of the art’ design and great economics, is a great fit with our existing single-aisle aircraft family.
“I have no doubt that our partnership with Bombardier will boost sales and the value of this programme tremendously. Not only will this partnership secure the C-Series and its industrial operations in Canada, the UK and China, it will also bring new jobs to the USA.”
Alain Bellemare, president and chief executive officer of Bombardier, said the group was very pleased to welcome Airbus to the C-Series programme. “Airbus is the perfect partner for us, Quebec and Canada. This partnership should more than double the value of the C-Series programme and ensure that our remarkable game-changing aircraft realises its full potential.”
After meeting executives from Bombardier and Airbus, UK Business Secretary Greg Clark said: “We’ll have more-detailed discussions as the deal progresses, but there was great optimism that work generally for Belfast will increase.
“Obviously, if demand increases, then some decisions will need to be taken as to where the future capacity can be located, and I would expect Belfast to be a good contender for that.”